Question: The U.S. Food and Drug Administration (FDA) is responsible for approving new drugs. Many consumer groups feel that the approval process is too easy, and, therefore, too many drugs are approved that are later found to be unsafe. On the other hand, there a number of industry lobbyists who are pushing for a more lenient approval process so that pharmaceutical companies can get new drugs approved more easily and quickly. Consider a null hypothesis that a new, unapproved drug is unsafe and an alternative hypothesis that a new, unapproved drug is safe.

a. Explain the risks of committing a Type I or Type II error.

b. Which type of error are the consumer groups trying to avoid? Explain.

c. Which type of error are the industry lobbyists trying to avoid? Explain.

d. How would it be possible to lower the chance of both Type I and Type II errors?